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SoftBank profit jumps 49% on boost from ARM, Vision Fund gains

[TOKYO] SoftBank Group's first-quarter profit climbed 49 per cent from a year earlier, thanks to investment gains.

The Japanese telecommunications provider and technology investor said operating profit was 715 billion yen (S$8.784 billion) in the three months ended June, boosted by a 245 billion yen gain from its Vision Fund and a 161 billion yen gain on the sale of subsidiary ARM's Chinese unit. Revenue was 2.27 trillion yen.

The results are overshadowed by the sale of Sprint Corp to T-Mobile US Inc and planned initial public offering of SoftBank's domestic wireless business. Founder Masayoshi Son has shifted his focus to the company's longer-term future and investments in overseas technology companies. Last year, he formed the Vision Fund, raising almost US$100 billion from big backers including Saudi Arabia and Apple Inc. Son has said the fund represents the transformation of SoftBank from a telecoms conglomerate to a holdings group with investments in the world's most influential technology companies.

The proposed US$26.5 billion takeover of Sprint by T-Mobile would combine the No 3 and No 4 wireless providers in the US. The two carriers have been pitching their deal as a combination of underdogs trying to better compete against industry giants AT&T Inc. and Verizon Communications Inc.

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SoftBank is interviewing banks to arrange the IPO of its domestic wireless business and plans to select several lead underwriters as early as August, people with knowledge of the matter have said. Foreign and local investment banks have been making formal pitches to SoftBank over the past few weeks, according to the people, who asked not to be identified because the information is private. The company aims for the mobile unit to begin trading in Tokyo in October and the offering could raise more than 2 trillion yen, they said.

Revenue from domestic telecom operations, which include wireless, broadband and fixed-line services, rose 4.6 per cent to 880.5 billion yen in the quarter. Profit was little changed. SoftBank had 33.6 million mobile subscribers, an increase of 434,000 from the previous quarter.

The Vision Fund contribution was mainly due to a valuation gain from the planned sale of Flipkart Online Services Pvt, the leading Indian e-commerce player, to Walmart Inc and increase in fair value of WeWork Companies Inc.

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